The Rosenberg Foundation – Supporting a class action against Wal-Mart

Alliance magazine

Established in 1935, the California-based Rosenberg Foundation is committed to nurturing promising efforts to create a more just and economically inclusive society. It has long supported impact litigation as one of the critical tools – along with policy advocacy, organizing, and public education – to advance structural reform of public policies and private practices. The latest, and potentially most far-reaching, example is supporting Equal Rights Advocates’ (ERA) and Impact Fund’s lawsuit challenging Wal-Mart’s pay and promotion policies for its female workers in the US.

In 2001, ERA, a non-profit whose mission is to secure equal rights and economic opportunity for women and girls, along with lead counsel, the Impact Fund, a non-profit foundation dedicated to supporting civil rights litigation, was joined by private law firms to file a nationwide class action Dukes v Wal-Mart Stores, Inc claiming discrimination against women in pay and promotions. If successfully resolved, the case had the potential to change the behaviour of the world’s largest employer, whose record on low wages, labour violations and anti-union practices is well documented. It could improve working conditions, recover over a billion dollars in wages wrongfully denied female workers, and enable women to gain punitive damages and promotions into higher-paying management jobs. 

Initially brought on behalf of 700,000 current and recent past women employees, the class is now estimated to exceed 2 million women. This is the largest civil rights class action in history, fitting to challenge the labour practices of a company the New York Times called a ‘nation unto itself’. With gross revenues exceeding $350 billion per year (larger than all its retail rivals combined), Wal-Mart’s influence in the US economy is unparalleled.

While Wal-Mart has been sued thousands of times, until now no systematic or class action suits for sex discrimination have been brought by its workers. Wal-Mart considers the millions it pays in legal fees and settlements as the cost of doing business. Given the potential of this national class action to fundamentally alter the company’s practices, the Rosenberg Foundation believed it was important to support ERA and the Impact Fund to lead the litigation strategy and ensure that workers’ perspectives shape the remedies.

The legal team has crafted a strategy combining litigation, grassroots struggle and adroit use of the media, drawing broad attention and public pressure. Consequently, Wal-Mart has revamped its pay system, raised female pay by $400 million per year, and adopted its first ever job posting process for management trainee jobs. Wal-Mart’s competitors adopted similar changes after the case was filed. Wal-Mart also agreed to cover more workers’ health benefits. While these changes are imperfect, they are an improvement.

Plaintiffs won a class certification decision in Federal District Court in June 2004. Wal-Mart appealed to the US 9th Circuit, lost again in 2007, and renewed its appeal. The trial on the merits of the case is on hold, pending this appeal.

These efforts require sustained support, given the David and Goliath nature of the case. Since the lawsuit was filed, Rosenberg has provided $500,000 in ongoing support to ERA to continue its role as lawyer and public interest voice in the case. The foundation has assets of approximately $60 million and awarded $2.6 million in grants in 2008. In 2008, the Rosenberg trustees agreed to guarantee a $250,000 loan made by Mercy Investment Program Inc, a non-profit lender that engages in socially responsible investment under the direction of the Sisters of Mercy of the Americas. The guaranty is Rosenberg’s first programme-related investment. This loan will enable the Impact Fund to cover some of the significant costs of bringing this landmark case to trial. Should the plaintiffs win, the loan will be repaid at no additional cost. If the plaintiffs lose, the Rosenberg Foundation will pay the loan.

‘This is consistent with our tradition of supporting the efforts of poor people and immigrants to get a fair stake in our society and economy,’ said the Honorable Henry Ramsey Jr, Rosenberg Board Chair. ‘We see our role as providing leadership in areas like impact litigation where our advocates find it hard to get support from traditional mainstream sources, yet where their work is particularly promising. The Wal-Mart case has already changed the way the company does business.’

For more information
Contact Ellen Widess, Senior Program Officer at the Rosenberg Foundation, at ewidess@rosenfound.org or visit http://www.rosenfound.org


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